The Finance Ministry has decided to constantly monitor large infrastructure projects under different ministries and central public sector enterprises (CPSES) in order to expedite capital expenditure of the Union government. To this end, the Finance Ministry would develop a dashboard where ministries could upload figures related to their infrastructure projects on periodic basis.
The decision came after senior officials from the ministry met heads of Maharatna and Navratna CPSEs and financial advisors of infrastructure ministries on Friday. Co-chaired by Economic Affairs Secretary Atanu Chakraborty and Expenditure Secretary GC Murmu, the meeting focussed on measures to ensure funding to infrastructure projects so as to boost capital expenditure and, in turn, pump liquidity in the market and boost demand.
The meeting also reviewed capital expenditure by various CPSEs and ministries, who were directed to adhere to the expenditure plan and accelerate investment activities. Notably, the Centre has a capital expenditure plan of Rs 3.3-lakh crore — including that of the Ministry of Railways and Road Transport — for the current financial year. Also, various CPSEs have earmarked funds for expansion and capacity enhancement.
The officials also reviewed release of payments for procurements and other contracts in infrastructure projects without delay to infuse liquidity in a time-bound manner. Resolution of outstanding payments which may have been held up on account of disputes was also taken up during the meeting.
Of late, Indian economy has been struggling to maintain its pace, with key macroeconomic parameters showing signs of decline. India’s GDP growth during the June quarter of FY20 slipped to a 6-year low of 5 per cent due to a slump in manufacturing output, weak consumer demand and deceleration in private investment. The economic downturn has particularly hit auto, manufacturing and real estate sectors.
As the private sector continues to struggle due to poor demand and declining sales, the government wants to utilise CPSEs’ spending powers to boost liquidity. The meeting today was also a part of the series of meetings being held at the Finance Ministry to revive the sagging economy.
Over the past few weeks, Finance Minister Nirmala Sitharaman has revealed a host of measures to remedy the slowdown in the economy. Last Friday, the Finance Minister announced consolidation of 10 state-run banks to form four financially strong and globally-competitive lenders. A week before that, FM Sitharaman had announced the rollback of super-rich tax on foreign and domestic equity investors, exemption of start-ups from ‘angel tax’, a package to address distress in the automobile sector, steps to help MSMEs, and more.
Last month, the RBI board had approved transfer of reserves worth Rs 1.76 lakh crore to the Centre, in accordance to the recommendations from Bimal Jalan committee on Economic Capital Framework. The funds are expected to help the government meet its fiscal deficit target.